To understand the nature of American and British “democracy promotion” in Iran, it is important to examine their historical practices regarding “democracy” in Iran. Specifically, the events of 1953 present a very important picture, in which the United States orchestrated its first foreign coup, with guidance and direction from the British, who had extensive oil interests in Iran. The first democratically elected government of Mohommad Mossadeq in 1951 announced the nationalization of the Anglo-Iranian Oil Company (later to be re-named British Petroleum), which had an exclusive monopoly on Iranian oil. This naturally angered the British, who, in 1952, convinced the CIA to help in a plot to overthrow Iran’s government.

The idea to topple the Iranian government was born in Britain, but it didn’t take much to convince the CIA to launch a joint operation with the SIS. Government documents were made public which revealed that CIA “officers orchestrating the Iran coup worked directly with royalist Iranian military officers, handpicked the prime minister's replacement, sent a stream of envoys to bolster the shah's courage, directed a campaign of bombings by Iranians posing as members of the Communist Party, and planted articles and editorial cartoons in newspapers.” The strategy was aimed at supporting an Iranian General and the Shah through CIA assets and financing, which would overthrow Mossadeq, “particularly if this combination should be able to get the largest mobs in the streets.”[67]

The Shah was to play a pivotal role, as he was “to stand fast as the C.I.A. stirred up popular unrest and then, as the country lurched toward chaos, to issue royal decrees dismissing Dr. Mossadegh and appointing General Zahedi prime minister.” CIA operatives stoked pressure by pretending to be Iranian Communists, threatening Muslim leaders with “savage punishment if they opposed Mossadegh,” in an effort to stir anti-Communist and anti-Mossadeq sentiments in the religious community. The CIA even bombed the house of a prominent Muslim. Further, the CIA was advancing a major propaganda campaign, as a major newspaper owner was paid $45,000 to support the efforts. The CIA, once the coup was underway, used American media as propaganda, in an attempt to legitimize the coup plotters, as the CIA sent The Associated Press a news release saying that, “unofficial reports are current to the effect that leaders of the plot are armed with two decrees of the shah, one dismissing Mossadegh and the other appointing General Zahedi to replace him.” The CIA also disseminated this propaganda through Iranian media.

Following the beginning of the coup, which began on August 15, Mossadeq suspended the Parliament, which ultimately played “into the C.I.A.'s hands.” After having several plotters arrested, he let his guard down. Then the American Embassy planned a counterattack for August 19, specifically using religious forces. At this time, the Communist Party blamed “Anglo-American intrigue” for the coup. However, just as the CIA thought it was a failure, Iranian papers began publishing en masse the Shah’s decrees, and suddenly large pro-Shah crowds were building in the streets. An Iranian journalist who was an important CIA agent, “led a crowd toward Parliament, inciting people to set fire to the offices of a newspaper owned by Dr. Mossadegh's foreign minister. Another Iranian C.I.A. agent led a crowd to sack the offices of pro-Tudeh papers.”

Then coup supporters in the military began to enter the streets, and soon “the crowds began to receive direct leadership from a few officers involved in the plot and some who had switched sides. Within an hour the central telegraph office fell, and telegrams were sent to the provinces urging a pro-shah uprising. After a brief shootout, police headquarters and the Ministry of Foreign Affairs fell as well.” Interestingly, according to the declassified documents, the CIA “hoped to plant articles in American newspapers saying Shah Mohammed Reza Pahlevi's return resulted from a homegrown revolt against a Communist-leaning government,” but that ultimately, “its operatives had only limited success in manipulating American reporters.” The CIA planted stories in US media, such as one instance where the State Department planted a CIA study in Newsweek.

One of the key lessons the CIA learned in this operation, was that it “exposed the agency's shortcomings in manipulating the American press.” The CIA even manipulated a reporter with the New York Times to disseminate propaganda. While Soviet media was proclaiming the US responsible for the coup, American mentions of this in the media dismissed these accusations outright, and never “examined such charges seriously.”[68]

By the end of Operation Ajax, as the CIA coup was codenamed, “some 300 people had died in firefights in the streets of Tehran,” largely due to the CIA “provoking street violence.” The coup resulted in “more than two decades of dictatorship under the Shah, who relied heavily on US aid and arms.”[69]